Robinhood Rolls Out College Football, NFL Prediction Markets

With the announcement on Tuesday that its Robinhood Derivatives, LLC (RHD) division will provide NFL and college football prediction markets, Robinhood Markets (NASDAQ: HOOD) may increase rivalry with established sportsbook providers.

According to the brokerage firm, customers can use the Prediction Markets Hub on the Robinhood mobile application to trade event contracts on "all college Power 4 schools and independents" as well as all NFL regular season games.  Clients must be approved for margin trading or the broker's second and third levels of options trading in order to be eligible for Robinhood Derivatives.

“Pro and college football prediction markets are rolling out now and will be available to all eligible customers in the coming days,” according to a statement issued by the financial services firm. “At launch, we’re offering contracts for the first two weeks of the pro and college seasons, and we plan to add weekly matchups as the season progresses (for example, week 3 games will launch after week 1 concludes).”

More than two billion contracts have been exchanged on Robinhood's platform since late last year, when it entered the prediction markets market just before the 2024 presidential election, a landmark event in the yes/no event contract area.

Robinhood Profiting on the Popularity of Football

This is not the first time that Robinhood has been involved with football; earlier this year, the trading business offered its derivatives clients event futures on the Super Bowl through a deal with prediction markets behemoth Kalshi.

Nonetheless, it is a recognition of football's widespread appeal in the United States and its position as the most wagered sport in this nation.  Additionally, Tuesday's revelation is a shot in the competitive bow of conventional sportsbook operators that depend heavily on the football season for their profits.

Since the typical Robinhood customer is 35 years old and the firm's largest age group is in their late 20s, gaming firms must take note of this competition. These age groups comprise the main range for sportsbook providers.

Even though the average Robinhood account size is only $4,800, many of those younger customers are enthusiastic cryptocurrency traders who are prepared to trade frequently and have high risk tolerances—qualities that gaming firms really value.

A move by Robinhood Football that might surprise critics

Regulators and watchers of the gambling sector may criticize Robinhood for its growing use of football derivatives.  Prediction markets, according to many in those camps, are placing sports wagers without state gaming licenses.

Although Robinhood made it obvious that customers may choose yes/no contracts to money line football bets, it did not specify whether or not its football contracts qualify as traditional sports bets.

“Unlike sports betting, where the firm sets a line, event contracts leverage the power and rigor of financial market structure and are offered in a marketplace where buyers and sellers interact to set the price,” according to the company. “Customers can access the contracts in real time and manage risk by adjusting–or exiting–their positions up to and throughout a game before a contract expires.”